Rescission does not prevent a claim for damages where the misrepresentation also caused loss. There are, however, a number of bars to rescission and the innocent party needs to elect early if it wishes to rescind the contract, as inactivity may signify affirmation of the contract.
For more detail, see Practice Note: Misrepresentation—rescission as a remedy. It is not uncommon for parties particularly in complex commercial contracts to agree provisions that seek to restrict or exclude the rights of one party to bring a claim for misrepresentation.
An exemption clause will not be effective to protect a defendant who has made a fraudulent misrepresentation. Where a clause in a contract seeks to limit or exclude liability for misrepresentations then, by virtue of MA , s 3 , the validity of such a clause may be subject to the test of reasonableness under Unfair Contract Terms Act UCTA , s Note, as from 1 October , such provisions apply to business-to-business contracts only and that for consumer contracts, reference should instead be made to the Consumer Rights Act , ss 61 — Misrepresentations—excluding and limiting liability for them.
Contractual estoppel. Contractual estoppel—the authorities. To assist you with analysing the strengths and weaknesses of a potential claim in misrepresentation, or its defence, we have produced the following checklists:. Similar but different to a claim for actionable misrepresentation are claims for negligent misstatement. The most obvious type of case is a careless response to a request for a specific piece of information. The usual claimant is the person who asked for the information or advice and to whom it was addressed.
But in some situations it is possible for third parties to claim. For guidance on the key elements for founding a claim for negligent misstatement, with particular reference to claims for financial loss and claims by third parties, including the decision in Carparo Industries v Dickman and issues of causation, see Practice Note: Negligent misstatement—founding a claim.
For further guidance, see Practice Notes:. Negligent misstatement—defences and remedies. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.
In a claim for deceit, the claimant must show that the defendant knew that they were not telling the truth. There must be proof of fraud and nothing less will do. The tort of deceit. We provide the following bespoke letter of claim precedents with accompanying drafting notes for claims for misrepresentation and negligent misstatement:.
Tort and negligence. Transferring contracts and rights of third parties. Sign-in Help. Claiming negligent misrepresentation or negligent misstatement—practical considerations Claiming negligent misrepresentation or negligent misstatement—practical considerations Practice notes.
The following Dispute Resolution practice note provides comprehensive and up to date legal information covering: Claiming negligent misrepresentation or negligent misstatement—practical considerations Claiming negligent misrepresentation or negligent misstatement—practical considerations A claim for negligent misrepresentation may often be brought alongside or in the alternative to a claim for negligent misstatement.
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Password Please enter your Password. Forgot password? Email your enquiry Contact details. What is negligent misstatement? To bring a claim for negligence in this context, a claimant must establish that: The defendant owed a duty of care; The defendant breached that duty of care; and The breach caused the claimant harm. Complexity of negligent misstatement cases The most complex aspect of negligent misstatement cases is usually the first limb of these criteria.
This is: Foreseeability : Was the damage suffered foreseeable? Was the particular claim foreseeable? Fairness : Would it be fair, just and reasonable to impose a duty in such a situation? Our expert lawyers in negligent misstatement Our lawyers are experienced in assessing the merits of these cases, and can confidently guide you through your dispute from its earliest stages.
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